Tag: growth

JANUARY 2017, MARITIME REVIEW, TRENDS FOR 2017

conjoncture 2017

INTRODUCTION

As 2016, three trends will describe maritime industry in 2017: 1-an increased volatility of demand 2- a sustained but uneven global recovery 3- a restructuring of the maritime supply.  This text presents an analysis of these trends.

1- An increased volatility of demand

1.1 New external factors

Variability of the risk makes demand for transport less predictable. In 2016, several factors triggered this instability, including fluctuations of exchange rates, slowdown of Chinese economy, lower oil prices and difficulties of the European economy.

In 2017, recovering of American and European economies is well engaged. Despite a slight slowdown of the GDP of the United States in the last quarter of 2016, one can anticipate a still dominant position of the U.S. dollar will continue in 2017.  The impact of a strong U.S. dollar boost U.S. imports.

In return, other external event to the industry are related to international political situation. The intention of Donald Trump to review several agreements of free-trade (NAFTA and the transpacific Partnership), the vote on the Brexit inducing the exit of Great Britain of the European Union are some examples.  The rise of protectionism could have the effect of undermining the global economic recovery.

In the sector of maritime transport, two important events occurred in 2016, the bankruptcy of Hanjin Shipping and the opening of the new Panama Canal.

Some believe that Hanjin Shipping’s bankrupcy it is precursor to a major crisis (Gerry Wang, CEO de Seaspan) in the industry. Hanjin’s situation is not unique and other maritime companies are also in difficulty. Because, recessions are the result of a chain process, if other bankruptcies were to happen, the effects could be devastating on the financial institutions, the clients or suppliers and shippers. It could even slowdown entire world economic activity.

In the case of the … Lire la suite

MAY 2016 PPP TO THE RESCUE OF THE FINANCING OF PORT INFRASTRUCTURE

For several years public-private partnerships (PPP) have been used as an alternative to public financing of major infrastructure projects. They have been applied to several areas, notably health, transportation, technology, information and the environment. PPP are still very popular throughout the world, particularly in  developing countries.

PPP in the maritime sector are not as well documented as those in other sectors. However, several major port infrastructure projects were funded according to this embodiment. Their popularity can be explained in several ways. It is largely related to  movements of privatization and liberalization around the world. These movements began in the 1970s, until the 1990s and early 2000s. Parallel to this situation, the opening of the port authorities have given opportunities for private companies.

The level competition between port sites and large international carriers has created a need for more capacity of transport (Gigantism) and treatment of their goods. To satisfy these requirements, port authorities must increase their capacity so that  infrastructure projects in the maritime sector are more and more  intensive in capital.

However, this adaptation to new standards has become a critical source of competitiveness and this can be translated into economic gains, income and added value. The increase of investment needed to remain competitive.  There is therefore need to better  funding, while governments are not necessary willing to offer such funding.

So far, the private sector has shown itself able to assume these new mandates and generate the required financing. It has demonstrated that it could  meet the needs of the industry and is a valid solution to the problems of the public sector. The challenge remains to know if participation of private sector has become a necessity to ensure the competitiveness of the port sites.

What is a PPP?

A PPP is a contractual arrangement between public bodies … Lire la suite